PETALING JAYA: MISC Bhd
’s long-term contracted earnings, fleet rejuvenation and improving prospects across its offshore and petroleum businesses should help the shipping group sail through market volatility, according to Hong Leong Investment Bank (HLIB) Research.
Following recent engagements with MISC, HLIB Research said it remained positive on the group’s outlook, supported by its long-term contracts and fleet renewal programme.
It maintained its “buy” call and target price of RM9.04, implying a 12.2% capital upside from its current price of RM8.06, with a dividend yield of 4.5%.
“We continue to view MISC’s risk-reward profile favourably, underpinned by earnings growth from its offshore and petroleum segments,” the research house said, adding that the group was well positioned to capitalise on the ongoing floater upcycle.
HLIB Research said MISC’s liquefied natural gas (LNG) segment remained resilient despite volatility in shipping rates, with term exposure rising to 98% in financial year 2025 (FY25), from 83% in FY24 and 89% in FY23. This provides greater earnings stability by insulating the segment from fluctuations in spot rates.
The group currently operates 39 gas vessels and plans to expand its fleet to 50 vessels by 2030, including 14 additional LNG carriers, two very large ethane carriers, one floating storage and regasification unit and two liquid carbon dioxide carriers.
The proportion of modern vessels is targeted to rise to 56% of the gas fleet by 2030.
Meanwhile, MISC’s petroleum arm AET is positioned to capture upside from stronger tanker rates through its 70:30 term-to-spot portfolio, while retaining earnings stability from long-term contracts.
HLIB Research expects sequentially stronger third-quarter FY26 earnings, supported by spot exposure and resilient time-charter rates.
The research house also highlighted MISC’s marine and heavy engineering business, where subsidiary Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) has rebuilt profitability following a RM467.7mil operating loss in FY23.
Its RM4.7bil order book as at the first quarter of FY26 provides earnings visibility, supported by offshore and energy infrastructure projects.
For MISC overall, HLIB Research forecasts core profit attributable to shareholders at RM2.41bil in FY26, broadly rising to RM2.79bil by FY28.
Revenue is projected to increase from RM11.15bil in FY25 to RM14.29bil in FY28.
HLIB Research said MISC’s fleet rejuvenation should further strengthen its long-term earnings resilience and competitiveness, while the group’s exposure to offshore developments provides additional upside.
